Figure 4-2
-Refer to Figure 4-2.Using the midpoint formula,calculate the absolute value of the price elasticity of demand between e and f.
A) 0.32
B) 0.4
C) 2.5
D) 3.125

Question

Figure 4-2 
-Refer to Figure 4-2.Using the midpoint formula,calculate the absolute value of the price elasticity of demand between e and f.
A) 0.32 
B) 0.4 
C) 2.5 
D) 3.125

Quizplus · Accepted Answer

The absolute value of the price elasticity of demand between e and f is calculated as follows:|ΔQ/Q| / |ΔP/P| = |(100 - 120)/120| / |(10 - 8)/8| = |(-20)/120| / |2/8| = 0.1667 / 0.25 = 0.6667Therefore, the absolute value of the price elasticity of demand between e and f is 0.6667, which is closest to choice D, 3.125.

Figure 4-2 -Refer to Figure 4-2.Using the Midpoint Formula,calculate the Absolute Value